| Senate 2498: Relating to Insurance [EPCC] |
CS for SB 2498 Second Engrossed
1 A bill to be entitled 2 An act relating to insurance; amending s. 3 215.5595, F.S.; providing that domestic and 4 other insurers writing only manufactured 5 housing policies are eligible to receive a 6 surplus note in a specified amount; amending s. 7 626.916, F.S.; providing requirements for 8 insurance coverage eligible for export for 9 residential property risks; requiring that the 10 insured be notified that coverage may be 11 available from Citizens Property Insurance 12 Corporation; amending s. 626.914, F.S.; 13 revising the definition of the term "diligent 14 effort"; amending s. 215.555, F.S.; revising 15 the dates regarding an exemption from emergency 16 assessments for medical malpractice insurance 17 premiums; amending s. 627.351, F.S.; revising 18 legislative findings to provide a finding that 19 the lack of affordable property insurance 20 threatens the public health, safety, and 21 welfare and threatens the economic health of 22 the state; revising provisions for determining 23 eligibility for coverage under Citizens 24 Property Insurance Corporation; amending s. 25 627.062, F.S.; providing that certain interest 26 paid by an insurer may not be included in rate 27 base or used to justify a rate or rate change; 28 amending s. 626.9541, F.S.; providing 29 additional unfair claim settlement practices; 30 amending s. 627.70131, F.S.; deleting the 31 definition of the term "insurer"; defining the Page 1 1 term "claim"; revising provisions relating to 2 when an insurer must pay a claim; providing 3 conditions under which interest must be paid; 4 extending the date for increasing rates; 5 prohibiting issuance of new certificates of 6 authority to certain insurers; requiring rate 7 filings of certain insurers to include certain 8 parent company profits information; 9 establishing a pilot program to offer optional 10 sinkhole coverage; amending s. 626.9201, F.S.; 11 revising requirements concerning cancellation 12 for nonpayment of premium of policies providing 13 coverage for property, casualty, surety, or 14 marine insurance; defining the term "nonpayment 15 of premium"; providing that certain contracts 16 or contractual obligations concerning such 17 coverage are void under specified conditions; 18 requiring the refund of certain premiums 19 received by an insurer; providing that the 20 internal design option of the Florida Building 21 Code remains in effect until a specified date 22 for a building permit application made before 23 that date, notwithstanding provisions of ch. 24 2007-1, Laws of Florida; providing an effective 25 date and for retroactive application; applying 26 the act to any actions taken with respect to a 27 building permit affected by such prior act; 28 providing effective dates. 29 30 Be It Enacted by the Legislature of the State of Florida: 31 Page 2 1 Section 1. Paragraphs (b) and (c) of subsection (2) of 2 section 215.5595, Florida Statutes, as amended by section 5 of 3 chapter 2007-1, Laws of Florida, are amended to read: 4 215.5595 Insurance Capital Build-Up Incentive 5 Program.-- 6 (2) The purpose of this section is to provide surplus 7 notes to new or existing authorized residential property 8 insurers under the Insurance Capital Build-Up Incentive 9 Program administered by the State Board of Administration, 10 under the following conditions: 11 (b) The insurer must contribute an amount of new 12 capital to its surplus which is at least equal to the amount 13 of the surplus note and must apply to the board by July 1, 14 2006. If an insurer applies after July 1, 2006, but before 15 June 1, 2007, the amount of the surplus note is limited to 16 one-half of the new capital that the insurer contributes to 17 its surplus, except that an insurer writing only manufactured 18 housing policies is eligible to receive a surplus note in the 19 amount of $7 million and a domestic mutual insurer is eligible 20 to receive a surplus note in the amount of $12.5 million. For 21 purposes of this section, new capital must be in the form of 22 cash or cash equivalents as specified in s. 625.012(1). 23 (c) The insurer's surplus, new capital, and the 24 surplus note must total at least $50 million, except for 25 insurers writing residential property insurance covering only 26 manufactured housing or for a domestic mutual insurer. The 27 insurer's surplus, new capital, and the surplus note must 28 total at least $14 million for insurers writing only 29 residential property insurance covering manufactured housing 30 policies as provided in paragraph (a). The surplus, new 31 Page 3 1 capital, and surplus note for a domestic mutual insurer must 2 total at least $25 million. 3 Section 2. Paragraph (e) is added to subsection (1) of 4 section 626.916, Florida Statutes, to read: 5 626.916 Eligibility for export.-- 6 (1) No insurance coverage shall be eligible for export 7 unless it meets all of the following conditions: 8 (e) For personal residential property risks, the 9 retail or producing agent must advise the insured in writing 10 that coverage may be available and may be less expensive from 11 Citizens Property Insurance Corporation. The notice must 12 include other information that states that Citizens' 13 assessments are higher and the coverage provided by Citizens 14 may be less than the property's existing coverage. If the 15 notice is signed by the insured, it is presumed that the 16 insured has been informed and knows that policies from 17 Citizens Property Insurance Corporation may be less expensive, 18 may provide less coverage, and will be accompanied by higher 19 assessments. 20 Section 3. Subsection (4) of section 626.914, Florida 21 Statutes, is amended to read: 22 626.914 Definitions.--As used in this Surplus Lines 23 Law, the term: 24 (4) "Diligent effort" means seeking coverage from and 25 having been rejected by at least three authorized insurers 26 currently writing this type of coverage and documenting these 27 rejections. However, if the residential structure has a 28 dwelling replacement cost of $1 million or more, the term 29 means seeking coverage from and having been rejected by at 30 least one authorized insurer currently writing this type of 31 coverage and documenting this rejection. Page 4 1 Section 4. Paragraph (b) of subsection (6) of section 2 215.555, Florida Statutes, as amended by chapter 2007-1, Laws 3 of Florida, is amended to read: 4 215.555 Florida Hurricane Catastrophe Fund.-- 5 (6) REVENUE BONDS.-- 6 (b) Emergency assessments.-- 7 1. If the board determines that the amount of revenue 8 produced under subsection (5) is insufficient to fund the 9 obligations, costs, and expenses of the fund and the 10 corporation, including repayment of revenue bonds and that 11 portion of the debt service coverage not met by reimbursement 12 premiums, the board shall direct the Office of Insurance 13 Regulation to levy, by order, an emergency assessment on 14 direct premiums for all property and casualty lines of 15 business in this state, including property and casualty 16 business of surplus lines insurers regulated under part VIII 17 of chapter 626, but not including any workers' compensation 18 premiums or medical malpractice premiums. As used in this 19 subsection, the term "property and casualty business" includes 20 all lines of business identified on Form 2, Exhibit of 21 Premiums and Losses, in the annual statement required of 22 authorized insurers by s. 624.424 and any rule adopted under 23 this section, except for those lines identified as accident 24 and health insurance and except for policies written under the 25 National Flood Insurance Program. The assessment shall be 26 specified as a percentage of direct written premium and is 27 subject to annual adjustments by the board in order to meet 28 debt obligations. The same percentage shall apply to all 29 policies in lines of business subject to the assessment issued 30 or renewed during the 12-month period beginning on the 31 effective date of the assessment. Page 5 1 2. A premium is not subject to an annual assessment 2 under this paragraph in excess of 6 percent of premium with 3 respect to obligations arising out of losses attributable to 4 any one contract year, and a premium is not subject to an 5 aggregate annual assessment under this paragraph in excess of 6 10 percent of premium. An annual assessment under this 7 paragraph shall continue as long as the revenue bonds issued 8 with respect to which the assessment was imposed are 9 outstanding, including any bonds the proceeds of which were 10 used to refund the revenue bonds, unless adequate provision 11 has been made for the payment of the bonds under the documents 12 authorizing issuance of the bonds. 13 3. Emergency assessments shall be collected from 14 policyholders. Emergency assessments shall be remitted by 15 insurers as a percentage of direct written premium for the 16 preceding calendar quarter as specified in the order from the 17 Office of Insurance Regulation. The office shall verify the 18 accurate and timely collection and remittance of emergency 19 assessments and shall report the information to the board in a 20 form and at a time specified by the board. Each insurer 21 collecting assessments shall provide the information with 22 respect to premiums and collections as may be required by the 23 office to enable the office to monitor and verify compliance 24 with this paragraph. 25 4. With respect to assessments of surplus lines 26 premiums, each surplus lines agent shall collect the 27 assessment at the same time as the agent collects the surplus 28 lines tax required by s. 626.932, and the surplus lines agent 29 shall remit the assessment to the Florida Surplus Lines 30 Service Office created by s. 626.921 at the same time as the 31 agent remits the surplus lines tax to the Florida Surplus Page 6 1 Lines Service Office. The emergency assessment on each insured 2 procuring coverage and filing under s. 626.938 shall be 3 remitted by the insured to the Florida Surplus Lines Service 4 Office at the time the insured pays the surplus lines tax to 5 the Florida Surplus Lines Service Office. The Florida Surplus 6 Lines Service Office shall remit the collected assessments to 7 the fund or corporation as provided in the order levied by the 8 Office of Insurance Regulation. The Florida Surplus Lines 9 Service Office shall verify the proper application of such 10 emergency assessments and shall assist the board in ensuring 11 the accurate and timely collection and remittance of 12 assessments as required by the board. The Florida Surplus 13 Lines Service Office shall annually calculate the aggregate 14 written premium on property and casualty business, other than 15 workers' compensation and medical malpractice, procured 16 through surplus lines agents and insureds procuring coverage 17 and filing under s. 626.938 and shall report the information 18 to the board in a form and at a time specified by the board. 19 5. Any assessment authority not used for a particular 20 contract year may be used for a subsequent contract year. If, 21 for a subsequent contract year, the board determines that the 22 amount of revenue produced under subsection (5) is 23 insufficient to fund the obligations, costs, and expenses of 24 the fund and the corporation, including repayment of revenue 25 bonds and that portion of the debt service coverage not met by 26 reimbursement premiums, the board shall direct the Office of 27 Insurance Regulation to levy an emergency assessment up to an 28 amount not exceeding the amount of unused assessment authority 29 from a previous contract year or years, plus an additional 4 30 percent provided that the assessments in the aggregate do not 31 exceed the limits specified in subparagraph 2. Page 7 1 6. The assessments otherwise payable to the 2 corporation under this paragraph shall be paid to the fund 3 unless and until the Office of Insurance Regulation and the 4 Florida Surplus Lines Service Office have received from the 5 corporation and the fund a notice, which shall be conclusive 6 and upon which they may rely without further inquiry, that the 7 corporation has issued bonds and the fund has no agreements in 8 effect with local governments under paragraph (c). On or after 9 the date of the notice and until the date the corporation has 10 no bonds outstanding, the fund shall have no right, title, or 11 interest in or to the assessments, except as provided in the 12 fund's agreement with the corporation. 13 7. Emergency assessments are not premium and are not 14 subject to the premium tax, to the surplus lines tax, to any 15 fees, or to any commissions. An insurer is liable for all 16 assessments that it collects and must treat the failure of an 17 insured to pay an assessment as a failure to pay the premium. 18 An insurer is not liable for uncollectible assessments. 19 8. When an insurer is required to return an unearned 20 premium, it shall also return any collected assessment 21 attributable to the unearned premium. A credit adjustment to 22 the collected assessment may be made by the insurer with 23 regard to future remittances that are payable to the fund or 24 corporation, but the insurer is not entitled to a refund. 25 9. When a surplus lines insured or an insured who has 26 procured coverage and filed under s. 626.938 is entitled to 27 the return of an unearned premium, the Florida Surplus Lines 28 Service Office shall provide a credit or refund to the agent 29 or such insured for the collected assessment attributable to 30 the unearned premium prior to remitting the emergency 31 assessment collected to the fund or corporation. Page 8 1 10. The exemption of medical malpractice insurance 2 premiums from emergency assessments under this paragraph is 3
repealed May 31, 2010 4 insurance premiums shall be subject to emergency assessments 5 attributable to loss events occurring in the contract years 6
commencing on June 1, 2010
7 Section 5. Paragraphs (a), (c), (m) and (r) of 8 subsection (6) of section 627.351, Florida Statutes, as 9 amended by section 21 of chapter 2007-1, Laws of Florida, are 10 amended, and paragraph (ff) is added to that subsection, to 11 read: 12 627.351 Insurance risk apportionment plans.-- 13 (6) CITIZENS PROPERTY INSURANCE CORPORATION.-- 14 (a)1. It is the public purpose of this subsection to 15 ensure the existence of an orderly market for property 16 insurance for Floridians and Florida businesses. The 17 Legislature finds that private insurers are unwilling or 18 unable to provide affordable property insurance coverage in 19 this state to the extent sought and needed. The absence of 20 affordable property insurance threatens the public health, 21 safety, and welfare and likewise threatens the economic health 22 of the state. The state therefore has a compelling public 23 interest and a public purpose to assist in assuring that 24 property in the state is insured and that it is insured at 25 affordable rates so as to facilitate the remediation, 26 reconstruction, and replacement of damaged or destroyed 27 property in order to reduce or avoid the negative effects 28 otherwise resulting to the public health, safety, and welfare; 29 to the economy of the state; and to the revenues of the state 30 and local governments which are needed to provide for the 31 public welfare. It is necessary, therefore, to provide Page 9 1 affordable property insurance to applicants who are in good 2 faith entitled to procure insurance through the voluntary 3 market but are unable to do so. The Legislature intends by 4 this subsection that affordable property insurance be provided 5 and that it continue to be provided, as long as necessary, 6 through Citizens Property Insurance Corporation, a government 7 entity that is an integral part of the state, and that is not 8 a private insurance company. To that end, Citizens Property 9 Insurance Company shall strive to increase the availability of 10 affordable property insurance in this state, while achieving 11 efficiencies and economies, and while providing service to 12 policyholders, applicants, and agents which is no less than 13 the quality generally provided in the voluntary market, for 14 the achievement of the foregoing public purposes. Because it 15 is essential for this government entity to have the maximum 16 financial resources to pay claims following a catastrophic 17 hurricane, it is the intent of the Legislature that Citizens 18 Property Insurance Corporation continue to be an integral part 19 of the state and that the income of the corporation be exempt 20 from federal income taxation and that interest on the debt 21 obligations issued by the corporation be exempt from federal 22
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19 2. The Residential Property and Casualty Joint 20 Underwriting Association originally created by this statute 21 shall be known, as of July 1, 2002, as the Citizens Property 22 Insurance Corporation. The corporation shall provide insurance 23 for residential and commercial property, for applicants who 24 are in good faith entitled, but are unable, to procure 25 insurance through the voluntary market. The corporation shall 26 operate pursuant to a plan of operation approved by order of 27 the Financial Services Commission. The plan is subject to 28 continuous review by the commission. The commission may, by 29 order, withdraw approval of all or part of a plan if the 30 commission determines that conditions have changed since 31 approval was granted and that the purposes of the plan require Page 11 1 changes in the plan. The corporation shall continue to operate 2 pursuant to the plan of operation approved by the Office of 3 Insurance Regulation until October 1, 2006. For the purposes 4 of this subsection, residential coverage includes both 5 personal lines residential coverage, which consists of the 6 type of coverage provided by homeowner's, mobile home owner's, 7 dwelling, tenant's, condominium unit owner's, and similar 8 policies, and commercial lines residential coverage, which 9 consists of the type of coverage provided by condominium 10 association, apartment building, and similar policies. 11 3. For the purposes of this subsection, the term 12 "homestead property" means: 13 a. Property that has been granted a homestead 14 exemption under chapter 196; 15 b. Property for which the owner has a current, written 16 lease with a renter for a term of at least 7 months and for 17 which the dwelling is insured by the corporation for $200,000 18 or less; 19 c. An owner-occupied mobile home or manufactured home, 20 as defined in s. 320.01, which is permanently affixed to real 21 property, is owned by a Florida resident, and has been granted 22 a homestead exemption under chapter 196 or, if the owner does 23 not own the real property, the owner certifies that the mobile 24 home or manufactured home is his or her principal place of 25 residence; 26 d. Tenant's coverage; 27 e. Commercial lines residential property; or 28 f. Any county, district, or municipal hospital; a 29 hospital licensed by any not-for-profit corporation qualified 30 under s. 501(c)(3) of the United States Internal Revenue Code; 31 or a continuing care retirement community that is certified Page 12 1 under chapter 651 and that receives an exemption from ad 2 valorem taxes under chapter 196. 3 4. For the purposes of this subsection, the term 4 "nonhomestead property" means property that is not homestead 5 property. 6
5. Effective January 1, 2009 7 lines residential structure that has a dwelling replacement 8 cost of $1 million or more, or a single condominium unit that 9 has a combined dwelling and content replacement cost of $1 10 million or more is not eligible for coverage by the 11 corporation. Such dwellings insured by the corporation on 12
December 31, 2008 13 the corporation until the end of the policy term. However, 14 such dwellings that are insured by the corporation and become 15 ineligible for coverage due to the provisions of this 16 subparagraph may reapply and obtain coverage in the high-risk 17 account and be considered "nonhomestead property" if the 18 property owner provides the corporation with a sworn affidavit 19 from one or more insurance agents, on a form provided by the 20 corporation, stating that the agents have made their best 21 efforts to obtain coverage and that the property has been 22 rejected for coverage by at least one authorized insurer and 23 at least three surplus lines insurers. If such conditions are 24 met, the dwelling may be insured by the corporation for up to 25 3 years, after which time the dwelling is ineligible for 26 coverage. The office shall approve the method used by the 27 corporation for valuing the dwelling replacement cost for the 28 purposes of this subparagraph. If a policyholder is insured by 29 the corporation prior to being determined to be ineligible 30 pursuant to this subparagraph and such policyholder files a 31 lawsuit challenging the determination, the policyholder may Page 13 1 remain insured by the corporation until the conclusion of the 2 litigation. 3 6. For properties constructed on or after January 1, 4 2009, the corporation may not insure any property located 5 within 2,500 feet landward of the coastal construction control 6 line created pursuant to s. 161.053 unless the property meets 7 the requirements of the code-plus building standards developed 8 by the Florida Building Commission. 9 7. It is the intent of the Legislature that 10 policyholders, applicants, and agents of the corporation 11 receive service and treatment of the highest possible level 12 but never less than that generally provided in the voluntary 13 market. It also is intended that the corporation be held to 14 service standards no less than those applied to insurers in 15 the voluntary market by the office with respect to 16 responsiveness, timeliness, customer courtesy, and overall 17 dealings with policyholders, applicants, or agents of the 18 corporation. 19 (c) The plan of operation of the corporation: 20 1. Must provide for adoption of residential property 21 and casualty insurance policy forms and commercial residential 22 and nonresidential property insurance forms, which forms must 23 be approved by the office prior to use. The corporation shall 24 adopt the following policy forms: 25 a. Standard personal lines policy forms that are 26 comprehensive multiperil policies providing full coverage of a 27 residential property equivalent to the coverage provided in 28 the private insurance market under an HO-3, HO-4, or HO-6 29 policy. 30 b. Basic personal lines policy forms that are policies 31 similar to an HO-8 policy or a dwelling fire policy that Page 14 1 provide coverage meeting the requirements of the secondary 2 mortgage market, but which coverage is more limited than the 3 coverage under a standard policy. 4 c. Commercial lines residential and nonresidential 5 policy forms that are generally similar to the basic perils of 6 full coverage obtainable for commercial residential structures 7 and commercial nonresidential structures in the admitted 8 voluntary market. 9 d. Personal lines and commercial lines residential 10 property insurance forms that cover the peril of wind only. 11 The forms are applicable only to residential properties 12 located in areas eligible for coverage under the high-risk 13 account referred to in sub-subparagraph (b)2.a. 14 e. Commercial lines nonresidential property insurance 15 forms that cover the peril of wind only. The forms are 16 applicable only to nonresidential properties located in areas 17 eligible for coverage under the high-risk account referred to 18 in sub-subparagraph (b)2.a. 19 f. The corporation may adopt variations of the policy 20 forms listed in sub-subparagraphs a.-e. that contain more 21 restrictive coverage. 22 2.a. Must provide that the corporation adopt a program 23 in which the corporation and authorized insurers enter into 24 quota share primary insurance agreements for hurricane 25 coverage, as defined in s. 627.4025(2)(a), for eligible risks, 26 and adopt property insurance forms for eligible risks which 27 cover the peril of wind only. As used in this subsection, the 28 term: 29 (I) "Quota share primary insurance" means an 30 arrangement in which the primary hurricane coverage of an 31 eligible risk is provided in specified percentages by the Page 15 1 corporation and an authorized insurer. The corporation and 2 authorized insurer are each solely responsible for a specified 3 percentage of hurricane coverage of an eligible risk as set 4 forth in a quota share primary insurance agreement between the 5 corporation and an authorized insurer and the insurance 6 contract. The responsibility of the corporation or authorized 7 insurer to pay its specified percentage of hurricane losses of 8 an eligible risk, as set forth in the quota share primary 9 insurance agreement, may not be altered by the inability of 10 the other party to the agreement to pay its specified 11 percentage of hurricane losses. Eligible risks that are 12 provided hurricane coverage through a quota share primary 13 insurance arrangement must be provided policy forms that set 14 forth the obligations of the corporation and authorized 15 insurer under the arrangement, clearly specify the percentages 16 of quota share primary insurance provided by the corporation 17 and authorized insurer, and conspicuously and clearly state 18 that neither the authorized insurer nor the corporation may be 19 held responsible beyond its specified percentage of coverage 20 of hurricane losses. 21 (II) "Eligible risks" means personal lines residential 22 and commercial lines residential risks that meet the 23 underwriting criteria of the corporation and are located in 24 areas that were eligible for coverage by the Florida Windstorm 25 Underwriting Association on January 1, 2002. 26 b. The corporation may enter into quota share primary 27 insurance agreements with authorized insurers at corporation 28 coverage levels of 90 percent and 50 percent. 29 c. If the corporation determines that additional 30 coverage levels are necessary to maximize participation in 31 quota share primary insurance agreements by authorized Page 16 1 insurers, the corporation may establish additional coverage 2 levels. However, the corporation's quota share primary 3 insurance coverage level may not exceed 90 percent. 4 d. Any quota share primary insurance agreement entered 5 into between an authorized insurer and the corporation must 6 provide for a uniform specified percentage of coverage of 7 hurricane losses, by county or territory as set forth by the 8 corporation board, for all eligible risks of the authorized 9 insurer covered under the quota share primary insurance 10 agreement. 11 e. Any quota share primary insurance agreement entered 12 into between an authorized insurer and the corporation is 13 subject to review and approval by the office. However, such 14 agreement shall be authorized only as to insurance contracts 15 entered into between an authorized insurer and an insured who 16 is already insured by the corporation for wind coverage. 17 f. For all eligible risks covered under quota share 18 primary insurance agreements, the exposure and coverage levels 19 for both the corporation and authorized insurers shall be 20 reported by the corporation to the Florida Hurricane 21 Catastrophe Fund. For all policies of eligible risks covered 22 under quota share primary insurance agreements, the 23 corporation and the authorized insurer shall maintain complete 24 and accurate records for the purpose of exposure and loss 25 reimbursement audits as required by Florida Hurricane 26 Catastrophe Fund rules. The corporation and the authorized 27 insurer shall each maintain duplicate copies of policy 28 declaration pages and supporting claims documents. 29 g. The corporation board shall establish in its plan 30 of operation standards for quota share agreements which ensure 31 that there is no discriminatory application among insurers as Page 17 1 to the terms of quota share agreements, pricing of quota share 2 agreements, incentive provisions if any, and consideration 3 paid for servicing policies or adjusting claims. 4 h. The quota share primary insurance agreement between 5 the corporation and an authorized insurer must set forth the 6 specific terms under which coverage is provided, including, 7 but not limited to, the sale and servicing of policies issued 8 under the agreement by the insurance agent of the authorized 9 insurer producing the business, the reporting of information 10 concerning eligible risks, the payment of premium to the 11 corporation, and arrangements for the adjustment and payment 12 of hurricane claims incurred on eligible risks by the claims 13 adjuster and personnel of the authorized insurer. Entering 14 into a quota sharing insurance agreement between the 15 corporation and an authorized insurer shall be voluntary and 16 at the discretion of the authorized insurer. 17 3. May provide that the corporation may employ or 18 otherwise contract with individuals or other entities to 19 provide administrative or professional services that may be 20 appropriate to effectuate the plan. The corporation shall have 21 the power to borrow funds, by issuing bonds or by incurring 22 other indebtedness, and shall have other powers reasonably 23 necessary to effectuate the requirements of this subsection, 24 including, without limitation, the power to issue bonds and 25 incur other indebtedness in order to refinance outstanding 26 bonds or other indebtedness. The corporation may, but is not 27 required to, seek judicial validation of its bonds or other 28 indebtedness under chapter 75. The corporation may issue bonds 29 or incur other indebtedness, or have bonds issued on its 30 behalf by a unit of local government pursuant to subparagraph 31 (g)2., in the absence of a hurricane or other weather-related Page 18 1 event, upon a determination by the corporation, subject to 2 approval by the office, that such action would enable it to 3 efficiently meet the financial obligations of the corporation 4 and that such financings are reasonably necessary to 5 effectuate the requirements of this subsection. The 6 corporation is authorized to take all actions needed to 7 facilitate tax-free status for any such bonds or indebtedness, 8 including formation of trusts or other affiliated entities. 9 The corporation shall have the authority to pledge 10 assessments, projected recoveries from the Florida Hurricane 11 Catastrophe Fund, other reinsurance recoverables, market 12 equalization and other surcharges, and other funds available 13 to the corporation as security for bonds or other 14 indebtedness. In recognition of s. 10, Art. I of the State 15 Constitution, prohibiting the impairment of obligations of 16 contracts, it is the intent of the Legislature that no action 17 be taken whose purpose is to impair any bond indenture or 18 financing agreement or any revenue source committed by 19 contract to such bond or other indebtedness. 20 4.a. Must require that the corporation operate subject 21 to the supervision and approval of a board of governors 22 consisting of eight individuals who are residents of this 23 state, from different geographical areas of this state. The 24 Governor, the Chief Financial Officer, the President of the 25 Senate, and the Speaker of the House of Representatives shall 26 each appoint two members of the board. At least one of the two 27 members appointed by each appointing officer must have 28 demonstrated expertise in insurance. The Chief Financial 29 Officer shall designate one of the appointees as chair. All 30 board members serve at the pleasure of the appointing officer. 31 All members of the board of governors are subject to removal Page 19 1 at will by the officers who appointed them. All board members, 2 including the chair, must be appointed to serve for 3-year 3 terms beginning annually on a date designated by the plan. Any 4 board vacancy shall be filled for the unexpired term by the 5 appointing officer. The Chief Financial Officer shall appoint 6 a technical advisory group to provide information and advice 7 to the board of governors in connection with the board's 8 duties under this subsection. The executive director and 9 senior managers of the corporation shall be engaged by the 10 board and serve at the pleasure of the board. Any executive 11 director appointed on or after July 1, 2006, is subject to 12 confirmation by the Senate. The executive director is 13 responsible for employing other staff as the corporation may 14 require, subject to review and concurrence by the board. 15 b. The board shall create a Market Accountability 16 Advisory Committee to assist the corporation in developing 17 awareness of its rates and its customer and agent service 18 levels in relationship to the voluntary market insurers 19 writing similar coverage. The members of the advisory 20 committee shall consist of the following 11 persons, one of 21 whom must be elected chair by the members of the committee: 22 four representatives, one appointed by the Florida Association 23 of Insurance Agents, one by the Florida Association of 24 Insurance and Financial Advisors, one by the Professional 25 Insurance Agents of Florida, and one by the Latin American 26 Association of Insurance Agencies; three representatives 27 appointed by the insurers with the three highest voluntary 28 market share of residential property insurance business in the 29 state; one representative from the Office of Insurance 30 Regulation; one consumer appointed by the board who is insured 31 by the corporation at the time of appointment to the Page 20 1 committee; one representative appointed by the Florida 2 Association of Realtors; and one representative appointed by 3 the Florida Bankers Association. All members must serve for 4 3-year terms and may serve for consecutive terms. The 5 committee shall report to the corporation at each board 6 meeting on insurance market issues which may include rates and 7 rate competition with the voluntary market; service, including 8 policy issuance, claims processing, and general responsiveness 9 to policyholders, applicants, and agents; and matters relating 10 to depopulation. 11 5. Must provide a procedure for determining the 12 eligibility of a risk for coverage, as follows: 13 a. Subject to the provisions of s. 627.3517, with 14 respect to personal lines residential risks, if the risk is 15 offered coverage from an authorized insurer at the insurer's 16 approved rate under either a standard policy including wind 17 coverage or, if consistent with the insurer's underwriting 18 rules as filed with the office, a basic policy including wind 19 coverage, for a new application to the corporation for 20 coverage, the risk is not eligible for any policy issued by 21 the corporation unless the premium for coverage from the 22
authorized insurer is more than 15
23 premium for comparable coverage from the corporation. If the 24 risk is not able to obtain any such offer, the risk is 25 eligible for either a standard policy including wind coverage 26 or a basic policy including wind coverage issued by the 27 corporation; however, if the risk could not be insured under a 28 standard policy including wind coverage regardless of market 29 conditions, the risk shall be eligible for a basic policy 30 including wind coverage unless rejected under subparagraph 8. 31 However, with regard to a policyholder of the corporation, the Page 21 1 policyholder remains eligible for coverage from the 2 corporation regardless of any offer of coverage from an 3 authorized insurer or surplus lines insurer. The corporation 4 shall determine the type of policy to be provided on the basis 5 of objective standards specified in the underwriting manual 6 and based on generally accepted underwriting practices. 7 (I) If the risk accepts an offer of coverage through 8 the market assistance plan or an offer of coverage through a 9 mechanism established by the corporation before a policy is 10 issued to the risk by the corporation or during the first 30 11 days of coverage by the corporation, and the producing agent 12 who submitted the application to the plan or to the 13 corporation is not currently appointed by the insurer, the 14 insurer shall: 15 (A) Pay to the producing agent of record of the 16 policy, for the first year, an amount that is the greater of 17 the insurer's usual and customary commission for the type of 18 policy written or a fee equal to the usual and customary 19 commission of the corporation; or 20 (B) Offer to allow the producing agent of record of 21 the policy to continue servicing the policy for a period of 22 not less than 1 year and offer to pay the agent the greater of 23 the insurer's or the corporation's usual and customary 24 commission for the type of policy written. 25 26 If the producing agent is unwilling or unable to accept 27 appointment, the new insurer shall pay the agent in accordance 28 with sub-sub-sub-subparagraph (A). 29 (II) When the corporation enters into a contractual 30 agreement for a take-out plan, the producing agent of record 31 Page 22 1 of the corporation policy is entitled to retain any unearned 2 commission on the policy, and the insurer shall: 3 (A) Pay to the producing agent of record of the 4 corporation policy, for the first year, an amount that is the 5 greater of the insurer's usual and customary commission for 6 the type of policy written or a fee equal to the usual and 7 customary commission of the corporation; or 8 (B) Offer to allow the producing agent of record of 9 the corporation policy to continue servicing the policy for a 10 period of not less than 1 year and offer to pay the agent the 11 greater of the insurer's or the corporation's usual and 12 customary commission for the type of policy written. 13 14 If the producing agent is unwilling or unable to accept 15 appointment, the new insurer shall pay the agent in accordance 16 with sub-sub-sub-subparagraph (A). 17 b. With respect to commercial lines residential risks, 18 for a new application to the corporation for coverage, if the 19 risk is offered coverage under a policy including wind 20 coverage from an authorized insurer at its approved rate, the 21 risk is not eligible for any policy issued by the corporation 22 unless the premium for coverage from the authorized insurer is 23
more than 15 24 comparable coverage from the corporation. If the risk is not 25 able to obtain any such offer, the risk is eligible for a 26 policy including wind coverage issued by the corporation. 27 However, with regard to a policyholder of the corporation, the 28 policyholder remains eligible for coverage from the 29 corporation regardless of any offer of coverage from an 30 authorized insurer or surplus lines insurer. 31 Page 23 1 (I) If the risk accepts an offer of coverage through 2 the market assistance plan or an offer of coverage through a 3 mechanism established by the corporation before a policy is 4 issued to the risk by the corporation or during the first 30 5 days of coverage by the corporation, and the producing agent 6 who submitted the application to the plan or the corporation 7 is not currently appointed by the insurer, the insurer shall: 8 (A) Pay to the producing agent of record of the 9 policy, for the first year, an amount that is the greater of 10 the insurer's usual and customary commission for the type of 11 policy written or a fee equal to the usual and customary 12 commission of the corporation; or 13 (B) Offer to allow the producing agent of record of 14 the policy to continue servicing the policy for a period of 15 not less than 1 year and offer to pay the agent the greater of 16 the insurer's or the corporation's usual and customary 17 commission for the type of policy written. 18 19 If the producing agent is unwilling or unable to accept 20 appointment, the new insurer shall pay the agent in accordance 21 with sub-sub-sub-subparagraph (A). 22 (II) When the corporation enters into a contractual 23 agreement for a take-out plan, the producing agent of record 24 of the corporation policy is entitled to retain any unearned 25 commission on the policy, and the insurer shall: 26 (A) Pay to the producing agent of record of the 27 corporation policy, for the first year, an amount that is the 28 greater of the insurer's usual and customary commission for 29 the type of policy written or a fee equal to the usual and 30 customary commission of the corporation; or 31 Page 24 1 (B) Offer to allow the producing agent of record of 2 the corporation policy to continue servicing the policy for a 3 period of not less than 1 year and offer to pay the agent the 4 greater of the insurer's or the corporation's usual and 5 customary commission for the type of policy written. 6 7 If the producing agent is unwilling or unable to accept 8 appointment, the new insurer shall pay the agent in accordance 9 with sub-sub-sub-subparagraph (A). 10 6. Must provide by July 1, 2007, that an application 11 for coverage for a new policy is subject to a waiting period 12 of 10 days before coverage is effective, during which time the 13 corporation shall make such application available for review 14 by general lines agents and authorized property and casualty 15 insurers. The board shall approve an exception that allows for 16 coverage to be effective before the end of the 10-day waiting 17 period, for coverage issued in conjunction with a real estate 18 closing. The board may approve such other exceptions as the 19 board determines are necessary to prevent lapses in coverage. 20 7. Must include rules for classifications of risks and 21 rates therefor. 22 8. Must provide that if premium and investment income 23 for an account attributable to a particular calendar year are 24 in excess of projected losses and expenses for the account 25 attributable to that year, such excess shall be held in 26 surplus in the account. Such surplus shall be available to 27 defray deficits in that account as to future years and shall 28 be used for that purpose prior to assessing assessable 29 insurers and assessable insureds as to any calendar year. 30 9. Must provide objective criteria and procedures to 31 be uniformly applied for all applicants in determining whether Page 25 1 an individual risk is so hazardous as to be uninsurable. In 2 making this determination and in establishing the criteria and 3 procedures, the following shall be considered: 4 a. Whether the likelihood of a loss for the individual 5 risk is substantially higher than for other risks of the same 6 class; and 7 b. Whether the uncertainty associated with the 8 individual risk is such that an appropriate premium cannot be 9 determined. 10 11 The acceptance or rejection of a risk by the corporation shall 12 be construed as the private placement of insurance, and the 13 provisions of chapter 120 shall not apply. 14 10. Must provide that the corporation shall make its 15 best efforts to procure catastrophe reinsurance at reasonable 16 rates, to cover its projected 100-year probable maximum loss 17 as determined by the board of governors. 18 11. Must provide that in the event of regular deficit 19 assessments under sub-subparagraph (b)3.a. or sub-subparagraph 20 (b)3.b., in the personal lines account, the commercial lines 21 residential account, or the high-risk account, the corporation 22 shall levy upon corporation policyholders in its next rate 23 filing, or by a separate rate filing solely for this purpose, 24 a Citizens policyholder surcharge arising from a regular 25 assessment in such account in a percentage equal to the total 26 amount of such regular assessments divided by the aggregate 27 statewide direct written premium for subject lines of business 28 for the prior calendar year. For purposes of calculating the 29 Citizens policyholder surcharge to be levied under this 30 subparagraph, the total amount of the regular assessment to 31 which this surcharge is related shall be determined as set Page 26 1 forth in subparagraph (b)3., without deducting the estimated 2 Citizens policyholder surcharge. Citizens policyholder 3 surcharges under this subparagraph are not considered premium 4 and are not subject to commissions, fees, or premium taxes; 5 however, failure to pay a market equalization surcharge shall 6 be treated as failure to pay premium. 7 12. The policies issued by the corporation must 8 provide that, if the corporation or the market assistance plan 9 obtains an offer from an authorized insurer to cover the risk 10 at its approved rates, the risk is no longer eligible for 11 renewal through the corporation, except as otherwise provided 12 in this subsection. 13 13. Corporation policies and applications must include 14 a notice that the corporation policy could, under this 15 section, be replaced with a policy issued by an authorized 16 insurer that does not provide coverage identical to the 17 coverage provided by the corporation. The notice shall also 18 specify that acceptance of corporation coverage creates a 19 conclusive presumption that the applicant or policyholder is 20 aware of this potential. 21 14. May establish, subject to approval by the office, 22 different eligibility requirements and operational procedures 23 for any line or type of coverage for any specified county or 24 area if the board determines that such changes to the 25 eligibility requirements and operational procedures are 26 justified due to the voluntary market being sufficiently 27 stable and competitive in such area or for such line or type 28 of coverage and that consumers who, in good faith, are unable 29 to obtain insurance through the voluntary market through 30 ordinary methods would continue to have access to coverage 31 from the corporation. When coverage is sought in connection Page 27 1 with a real property transfer, such requirements and 2 procedures shall not provide for an effective date of coverage 3 later than the date of the closing of the transfer as 4 established by the transferor, the transferee, and, if 5 applicable, the lender. 6 15. Must provide that, with respect to the high-risk 7 account, any assessable insurer with a surplus as to 8 policyholders of $25 million or less writing 25 percent or 9 more of its total countrywide property insurance premiums in 10 this state may petition the office, within the first 90 days 11 of each calendar year, to qualify as a limited apportionment 12 company. A regular assessment levied by the corporation on a 13 limited apportionment company for a deficit incurred by the 14 corporation for the high-risk account in 2006 or thereafter 15 may be paid to the corporation on a monthly basis as the 16 assessments are collected by the limited apportionment company 17 from its insureds pursuant to s. 627.3512, but the regular 18 assessment must be paid in full within 12 months after being 19 levied by the corporation. A limited apportionment company 20 shall collect from its policyholders any emergency assessment 21 imposed under sub-subparagraph (b)3.d. The plan shall provide 22 that, if the office determines that any regular assessment 23 will result in an impairment of the surplus of a limited 24 apportionment company, the office may direct that all or part 25 of such assessment be deferred as provided in subparagraph 26 (g)4. However, there shall be no limitation or deferment of an 27 emergency assessment to be collected from policyholders under 28 sub-subparagraph (b)3.d. 29 16. Must provide that the corporation appoint as its 30 licensed agents only those agents who also hold an appointment 31 as defined in s. 626.015(3) with an insurer who at the time of Page 28 1 the agent's initial appointment by the corporation is 2 authorized to write and is actually writing personal lines 3 residential property coverage, commercial residential property 4 coverage, or commercial nonresidential property coverage 5 within the state. 6 17. Must provide, by July 1, 2007, a premium payment 7 plan option to its policyholders which allows for quarterly 8 and semiannual payment of premiums. 9
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18. 2 manufactured homes built prior to 1994 to actual cash value of 3 the dwelling rather than replacement costs of the dwelling. 4
19. 5 board determines, consistent with the requirements of this 6 subsection. 7
20. 8 specified hurricane mitigation construction features as a 9 condition of eligibility for coverage. 10 (m)1. Rates for coverage provided by the corporation 11 shall be actuarially sound and subject to the requirements of 12 s. 627.062, except as otherwise provided in this paragraph. 13 The corporation shall file its recommended rates with the 14 office at least annually. The corporation shall provide any 15 additional information regarding the rates which the office 16 requires. The office shall consider the recommendations of the 17 board and issue a final order establishing the rates for the 18 corporation within 45 days after the recommended rates are 19 filed. The corporation may not pursue an administrative 20 challenge or judicial review of the final order of the office. 21 2. In addition to the rates otherwise determined 22 pursuant to this paragraph, the corporation shall impose and 23 collect an amount equal to the premium tax provided for in s. 24 624.509 to augment the financial resources of the corporation. 25 3. After the public hurricane loss-projection model 26 under s. 627.06281 has been found to be accurate and reliable 27 by the Florida Commission on Hurricane Loss Projection 28 Methodology, that model shall serve as the minimum benchmark 29 for determining the windstorm portion of the corporation's 30 rates. This subparagraph does not require or allow the 31 Page 30 1 corporation to adopt rates lower than the rates otherwise 2 required or allowed by this paragraph. 3 4. The rate filings for the corporation which were 4 approved by the office and which took effect January 1, 2007, 5 are rescinded, except for those rates that were lowered. As 6 soon as possible, the corporation shall begin using the lower 7 rates that were in effect on December 31, 2006, and shall 8 provide refunds to policyholders who have paid higher rates as 9 a result of that rate filing. The rates in effect on December 10 31, 2006, shall remain in effect for the 2007 and 2008 11
calendar years 12 a lower rate. The next rate change that may increase rates 13
shall take effect January 1, 2009
14 filing recommended by the corporation and established by the 15 office, subject to the requirements of this paragraph. 16 (r)1. There shall be no liability on the part of, and 17 no cause of action of any nature shall arise against, any 18 assessable insurer or its agents or employees, the corporation 19 or its agents or employees, members of the board of governors 20 or their respective designees at a board meeting, corporation 21 committee members, or the office or its representatives, for 22 any action taken by them in the performance of their duties or 23 responsibilities under this subsection. Such immunity does not 24 apply to: 25
a. 26 willful tort; 27
b. 28 breach of any contract or agreement pertaining to insurance 29 coverage; 30
c. 31
payment of debt; Page 31 1
d. 2 to enforce an assessable insurer's obligations to the 3
corporation under this subsection;
or 4 e. The corporation in any pending or future action for 5 breach of contract or for benefits under a policy issued by 6 the corporation; in any such action, the corporation shall be 7 liable to the policyholders and beneficiaries for attorney's 8 fees under s. 627.428. 9 2. The corporation shall manage its claim employees, 10 independent adjusters, and others who handle claims to ensure 11 they carry out the corporation's duty to its policyholders to 12 handle claims carefully, timely, diligently, and in good 13 faith, balanced against the corporation's duty to the state to 14 manage its assets responsibly to minimize its assessment 15 potential. 16 (ff) The office may establish a pilot program to offer 17 optional sinkhole coverage in one or more counties or other 18 territories of the corporation for the purpose of implementing 19 s. 627.706, as amended by s. 30 of chapter 2007-1, Laws of 20 Florida. Under the pilot program, the corporation is not 21 required to issue a notice of nonrenewal to exclude sinkhole 22 coverage upon the renewal of existing policies, but may 23 exclude such coverage using a notice of coverage change. 24 Section 6. Subsection (11) is added to section 25 627.062, Florida Statutes, as amended by section 18 of chapter 26 2007-1, Laws of Florida, to read: 27 627.062 Rate standards.-- 28 (11) Any interest paid pursuant to s. 627.70131(5) may 29 not be included in the insurer's rate base and may not be used 30 to justify a rate or rate change. 31 Page 32 1 Section 7. Paragraph (i) of subsection (1) of section 2 626.9541, Florida Statutes, is amended to read: 3 626.9541 Unfair methods of competition and unfair or 4 deceptive acts or practices defined.-- 5 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR 6 DECEPTIVE ACTS.--The following are defined as unfair methods 7 of competition and unfair or deceptive acts or practices: (i) Unfair claim settlement practices.-- 9 1. Attempting to settle claims on the basis of an 10 application, when serving as a binder or intended to become a 11 part of the policy, or any other material document which was 12 altered without notice to, or knowledge or consent of, the 13 insured; 14 2. A material misrepresentation made to an insured or 15 any other person having an interest in the proceeds payable 16 under such contract or policy, for the purpose and with the 17 intent of effecting settlement of such claims, loss, or damage 18 under such contract or policy on less favorable terms than 19 those provided in, and contemplated by, such contract or 20
policy; 21 3. A violation of s. 627.70131(5), if the insurer's 22 handling of the claim is found to be dishonest or in reckless 23 disregard for the rights of any insured; 24 4. Failing to pay undisputed amounts of partial or 25 full benefits under first-party property insurance policies 26 within 30 days after determining the amounts of partial or 27 full benefits and agreeing to coverage; or 28
5. 29 to indicate a general business practice any of the following: 30 a. Failing to adopt and implement standards for the 31 proper investigation of claims; Page 33 1 b. Misrepresenting pertinent facts or insurance policy 2 provisions relating to coverages at issue; 3 c. Failing to acknowledge and act promptly upon 4 communications with respect to claims; 5 d. Denying claims without conducting reasonable 6 investigations based upon available information; 7 e. Failing to affirm or deny full or partial coverage 8 of claims, and, as to partial coverage, the dollar amount or 9 extent of coverage, or failing to provide a written statement 10 that the claim is being investigated, upon the written request 11 of the insured within 30 days after proof-of-loss statements 12 have been completed; 13 f. Failing to promptly provide a reasonable 14 explanation in writing to the insured of the basis in the 15 insurance policy, in relation to the facts or applicable law, 16 for denial of a claim or for the offer of a compromise 17 settlement; 18 g. Failing to promptly notify the insured of any 19 additional information necessary for the processing of a 20 claim; or 21 h. Failing to clearly explain the nature of the 22 requested information and the reasons why such information is 23 necessary. 24 Section 8. Subsections (4) and (5) of section 25 627.70131, Florida Statutes, as amended by section 27 of 26 chapter 2007-1, Laws of Florida, are amended to read: 27 627.70131 Insurer's duty to acknowledge communications 28 regarding claims; investigation.-- 29 (4) For purposes of this section, the term "claim" 30 means any of the following: 31 Page 34 1 (a) A claim under an insurance policy providing 2 residential coverage as defined in s. 627.4025(1); 3 (b) A claim for structural or contents coverage under 4 a commercial property insurance policy if the insured 5 structure is 10,000 square fee or less; or 6 (c) A claim for contents coverage under a commercial 7 tenants policy if the insured premises is 10,000 square feet 8
or less. 9 (5) Within 90 days after an insurer receives notice of 10 a property insurance claim from a policyholder under a policy 11 providing residential coverage as defined in s. 627.4025, the 12 insurer shall pay or deny such claim or a portion of the claim 13 unless the failure to pay such claim or a portion of the claim 14 is caused by factors beyond the control of the insurer which 15 reasonably prevent such payment. Any payment of a claim or 16 portion of a claim paid 90 days after the insurer receives 17 notice of the claim, or paid more than 15 days after there are 18 no longer factors beyond the control of the insurer which 19 reasonably prevented such payment, whichever is later, shall 20 bear interest at the rate set forth in s. 55.03. Interest 21 begins to accrue from the date the insurer receives notice of 22 the claim. The provisions of this subsection may not be 23 waived, voided, or nullified by the terms of the insurance 24 policy. If there is a right to prejudgment interest, the 25 insured shall select whether to receive prejudgment interest 26 or interest under this subsection. Interest is payable when 27 the claim or portion of the claim is paid. Failure to comply 28 with this subsection constitutes a violation of this code. 29 Section 9. Effective January 1, 2008, and 30 notwithstanding any other provision of law: 31 Page 35 1 (1) A new certificate of authority for the transaction 2 of residential property insurance may not be issued to any 3 insurer domiciled in this state which is a wholly owned 4 subsidiary of an insurer authorized to do business in any 5 other state. 6 (2) The rate filings of any insurer domiciled in this 7 state that is a wholly owned subsidiary of an insurer 8 authorized to do business in any other state shall include 9 information relating to the profits of the parent company of 10 the insurer domiciled in this state. 11 Section 10. Subsection (2) of section 626.9201, 12 Florida Statutes, is amended to read: 13 626.9201 Notice of cancellation or nonrenewal.-- 14 (2) An insurer issuing a policy providing coverage for 15 property, casualty, surety, or marine insurance shall give the 16 named insured written notice of cancellation or termination 17 other than nonrenewal at least 45 days prior to the effective 18 date of the cancellation or termination, including in the 19 written notice the reason or reasons for the cancellation or 20 termination, except that: 21 (a) When cancellation is for nonpayment of premium, a t 22 least 10 days' written notice of cancellation accompanied by 23 the reason therefor shall be given. As used in this paragraph, 24 the term "nonpayment of premium" means the failure of the 25 named insured to discharge when due any of his or her 26 obligations in connection with the payment of premiums on a 27 policy or an installment of such a premium, whether the 28 premium or installment is payable directly to the insurer or 29 its agent or indirectly under any plan for financing premiums 30 or extension of credit or the failure of the named insured to 31 maintain membership in an organization if such membership is a Page 36 1 condition precedent to insurance coverage. The term also 2 includes the failure of a financial institution to honor the 3 check of an applicant for insurance which was delivered to a 4 licensed agent for payment of a premium, even if the agent 5 previously delivered or transferred the premium to the 6 insurer. If a dishonored check represents payment of the 7 initial premium, the contract, and all contractual obligations 8 are void ab initio unless the nonpayment is cured within the 9 earlier of 5 days after actual notice by certified mail is 10 received by the applicant or 15 days after notice is sent to 11 the applicant by certified mail or registered mail, and, if 12 the contract is void, any premium received by the insurer from 13 a third party shall be refunded to that party in full; and 14 (b) When such cancellation or termination occurs 15 during the first 90 days during which the insurance is in 16 force and the insurance is canceled or terminated for reasons 17 other than nonpayment, at least 20 days' written notice of 18 cancellation or termination accompanied by the reason therefore 19 shall be given except where there has been a material 20 misstatement or misrepresentation or failure to comply with 21 the underwriting requirements established by the insurer. 2 Section 11. Notwithstanding section 9 of chapter 23 2007-1, Laws of Florida, the internal design option provided 24 in Section 1609.1.4.1, Florida Building Code, Building Volume, 25 and Section R301.2.1.2, Florida Building Code, Residential 26 Volume, shall remain in effect until June 1, 2007, for a 27 building permit application made before that date. 28 Section 12. Section 11 of this act shall take effect 29 upon becoming a law and applies retroactively to January 25, 30 2007, the effective date of chapter 2007-1, Laws of Florida. 31 Section 11 of this act applies to any action taken with Page 37 1 respect to a building permit affected by section 9 of chapter 2 2007-1, Laws of Florida, including any actions, legal or 3 ministerial, pertaining to the issuance, revocation, or 4 modifications of any building permit initiated or issued 5 before, on, or after January 25, 2007, or pending as of 6 January 25, 2007. If the retroactivity of any provision of 7 Section 11 of this act or its retroactive application to any 8 person or circumstance is held invalid, the invalidity does 9 not affect the retroactivity or retroactive application of 10 other provisions of Section 11 of this act. 11 Section 13. Except as otherwise expressly provided in 12 this act, this act shall take effect upon becoming a law. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Page 38 CODING:
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